Market Overview

An argument in favor of argument

There’s a story about a medieval realm that had just reunited after more than half a century of internal strife.

The young duke called the first session of his newly reconstituted privy council and, as he walked into the chamber, half the councilors rose to their feet. The other half fell to their knees.

“Everyone, just take your seats,” the duke ordered. “I appreciate this show of respect, but I would prefer if you selected one way of displaying it. Whatever the old privy council did in the presence of my grandfather, that would be the most proper.”

None of the advisors were old enough to remember what that was, but they soon found a one-time servant of the old duke’s chamberlain, now a man of at least 90 years. A carriage was sent to bring him to the privy council’s chamber.

“Elder, we rely on your long memory to settle an important matter,” the leader of the first faction said. “Since the early days of the schism, my colleagues have believed that one stands in His Grace’s presence.”

“That was not the custom of the court of the old duke,” the whitebeard croaked.

“Then we were right!” exclaimed the leader of the other faction. “We are to kneel in his presence.”

“That was not the custom of the court of the old duke,” the old man croaked again.

“Well it must be one or the other!” the first faction leader fumed at him. “We have hundreds of more pressing problems with which to contend, but we will fail to accomplish anything until we know how we’re supposed to greet our ruler!”

“This dispute is causing passions to flare!” his rival continued. “We cannot even be in the same room without shouting at each other about this – then we are all so enraged it is impossible for us to agree on anything else and we end up shouting about everything and agreeing on nothing!”

“That!” the old man said. “That was the custom of the court of the old duke.”

Ever after, happily or not

As Americans, our lot is much the same as the denizens of that old duchy. We are nothing without our disagreements.

We haven’t been tilling the same soil for a thousand years, and we don’t all look the same. We aren’t even necessarily bound by religion or language. The only things that unite us as a people are ideas.

But ideas are not set in stone. They are open to interpretation and they are open to challenge – which means they must be open to discussion.

The temperature of that discussion will match the fever of the times. Sometimes we will be able to hear out someone who agrees with us 80% of the time and eventually find common ground. At other times voices will be so strident that the decibel level will drown out all nuance.

But the discussion must go on, because the work of defining America and charting its future must go on. Perhaps this can’t happen until one or both contributors to the day’s shouting match have run out of breath, but there must be an occasional pause to listen. Maybe you can get away with tuning out or banning ideas with which you disagree if you’re inside the academia bubble. But if you’re in the business of providing financial advice, it is your role to listen. You must listen to your clients, certainly, but you must also listen to others even if – especially if! – these are not the voices your client generally hears.

Long live the discussion

Last month in this space we put forward a controversial issue, that of universal basic income. This economic policy proposal, although highly idiosyncratic, is being seriously discussed in the public square during the ramp-up to a presidential campaign. We were scrupulous to state that we were presenting the case, not taking a side.

We got email, which we always welcome and appreciate the dialogue that ensued. We stand by our discussion of UBI, just as we stood by our discussion of Georgist economics, a school of thought which was equally embraced and rejected by both capitalists and socialists. Similarly, we intend to be equally even-handed as we discuss other economic thoughts that enter the national debate including:

• How independent from the federal government is the Federal Reserve? How independent should it be? Do we need it at all?
• How accurate are credit scores as predictors of individuals’ ability and willingness to pay their debts? Are there better ways to make such a determination, and is the current system doing more harm than good?
• What does the future hold for Medicare, Medicaid and Social Security? Will that money be gone before you can claim any of what you’ve paid in, or are those perennial doomsday predictions that “the well will run dry within 20 years” based on dubious assumptions?

Breaking news is bound to reveal other concepts which a canny investor might want to know about. And we will continue to stick to the facts without advocating for any position.

But that doesn’t mean you can’t or shouldn’t advocate.

We anticipate your email.

We welcome your comments.

We embrace the discussion

Rex

Rex Moxley joined Smith Anglin in 2001. Since then, he's served as a Managing Partner and as a member of the firm's Investment Committee. He regularly meets with prospective clients, counsels existing clients, participates in investment portfolio analysis and develops materials for communicating with the firm's clientele and target markets. He holds a BBA in Finance and Marketing, a graduate degree in Law and numerous securities licenses and designations.